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The pound/dollar currency pair seems to have turned in a southerly direction. This can be judged by a fairly strong decline in the last two trading days. In particular, yesterday’s downward trend of GBP/USD was influenced by the minutes of the last FOMC meeting of the US Federal Reserve, which were kept in quite positive tones and provided significant support to the US currency. You can learn more about this in today’s article by the author on the euro/dollar currency pair. Before moving on to the technical part of the GBP/USD review, I think it is necessary to highlight today’s events that may affect the price dynamics of this instrument. So, at 09:30 London time, a report on the index of business activity in the construction sector will be released from the UK. Later, a more important event will be the speech of the Chairman of the Federal Reserve System (Fed) of the United States Jerome Powell, which will take place at 17:00 (London time).
As you can see, after a strong two-day fall, the pound/dollar pair is trading near the strong technical level of 1.3740. Thus, the previously made assumptions that it would be very difficult for the pair to gain a foothold above the important mark of 1.3800 have been confirmed and we can say that the pound bulls failed to gain a foothold above this significant level. In today’s trading, the pair rose to 1.3781, however, it met strong resistance from sellers and retreated, leaving a long upper shadow at the top. This shadow, as well as the inability of the players to raise the price to 1.3800, once again indicate their weakness, which means that the pair is under the control of the bears. Another important nuance is the confident departure of the price to the lower border of the Ichimoku indicator cloud, which increases the chances of exiting the cloud in the southern direction. Also, once again, it is worth noting the value of the middle line of the ascending channel (dotted), which this time acted as a strong resistance and did not let the pair go higher. During the completion of the article, the bullish body of the candle melts literally before our eyes. If the situation does not change and the above events do not support the British currency, then the third day in a row will end for the pound/dollar pair not only with a decline but also with a possible exit down from the daily cloud of the Ichimoku indicator. At least, the technical picture on the daily scale is quite consistent with this trading scenario.
On the hourly chart, the GBP/USD currency pair is in a downward trend. This is indicated by the direction of the price itself, and the fact that the quote is significantly below the used moving averages of 50 MA, 89 EMA, and 200 EMA. For the situation on the pair to change, the bulls on the instrument need to update the current highs at 1.3781, then continue to rise and close the session above the designated moving averages, as well as a strong and important mark of 1.3800. Only if these conditions are met, you can count on the subsequent strengthening of the quote. In my personal opinion, it will be extremely difficult for players to complete the designated tasks for promotion, without a strong driver. Thus, if we consider trading ideas for the pound, then the main one is the sale of the pound. I recommend you to take a closer look at the opening of short positions on GBP/USD, in case of a rise in the price zone of 13760-1. 3775, and the appearance of bearish candle signals. However, right now, the pressure on the pair has increased significantly, so such a pullback may not take place. For those who trade aggressively and are not afraid of risks, I recommend trying to sell the pair on the market or after minor rebounds to the area of 1.3745/50.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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